B-165524, MAY 15, 1969

B-165524: May 15, 1969

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TO AIRBORNE FREIGHT CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 23. THE BILL OF LADING SHOWS THAT AT ORIGIN THE SHIPMENT WAS TENDERED TO PACIFIC AIR FREIGHT AND INCLUDES IN THE ROUTING BLOCK THE FOLLOWING NOTATION: "PACIFIC AIR FREIGHT. AIR BILL NO: 1264450 C/O AIRPORT DRAYAGE SERVICE" THE RECORD INCLUDES A GOVERNMENT BILL OF LADING CORRECTION NOTICE WHICH SHOWS THAT THE SHIPMENT WAS MOVED BY PACIFIC AIR FREIGHT (QUICK AIR FREIGHT) FROM COLUMBUS. WHERE IT WAS DISCOVERED THAT THE ENGINES WERE TOO LARGE TO MOVE IN AIR TRANSPORTATION. THE ENGINES WERE THEN TRANSPORTED BY CONSOLIDATED FREIGHTWAYS FROM INDIANAPOLIS TO TRAVIS AFB. WHERE ONE ENGINE WAS DELIVERED AND TO OAKLAND. WHERE THE OTHER TWO WERE DELIVERED.

B-165524, MAY 15, 1969

TO AIRBORNE FREIGHT CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 23, 1968, REQUESTING A REVIEW OF OUR SETTLEMENT CERTIFICATE OF SEPTEMBER 18, 1968 (OUR TK 874038), WHICH DISALLOWED YOUR CLAIM FOR $4,420.08, THE ADDITIONAL FREIGHT CHARGES ALLEGEDLY DUE PACIFIC AIR FREIGHT, INC. (PAF), NOW MERGED WITH YOUR COMPANY, FOR THE TRANSPORTATION OF THREE CRATES OF INTERNAL COMBUSTION ENGINES WEIGHING 21,900 POUNDS FROM COLUMBUS, OHIO, TO TRAVIS AIR FORCE BASE, CALIFORNIA, VIA SAN FRANCISCO INTERNATIONAL AIRPORT, UNDER GOVERNMENT BILL OF LADING NO. C-8665170, DATED FEBRUARY 27, 1966.

THE BILL OF LADING SHOWS THAT AT ORIGIN THE SHIPMENT WAS TENDERED TO PACIFIC AIR FREIGHT AND INCLUDES IN THE ROUTING BLOCK THE FOLLOWING NOTATION: "PACIFIC AIR FREIGHT, AIR BILL NO: 1264450 C/O AIRPORT DRAYAGE SERVICE" THE RECORD INCLUDES A GOVERNMENT BILL OF LADING CORRECTION NOTICE WHICH SHOWS THAT THE SHIPMENT WAS MOVED BY PACIFIC AIR FREIGHT (QUICK AIR FREIGHT) FROM COLUMBUS, OHIO, TO INDIANAPOLIS, INDIANA, WHERE IT WAS DISCOVERED THAT THE ENGINES WERE TOO LARGE TO MOVE IN AIR TRANSPORTATION. THE ENGINES WERE THEN TRANSPORTED BY CONSOLIDATED FREIGHTWAYS FROM INDIANAPOLIS TO TRAVIS AFB, CALIFORNIA, WHERE ONE ENGINE WAS DELIVERED AND TO OAKLAND, CALIFORNIA, WHERE THE OTHER TWO WERE DELIVERED.

FOR THIS SERVICE PAF COLLECTED ON ITS BILL NO. 2006 FREIGHT CHARGES OF $5,770.65, APPARENTLY BASED ON PACIFIC AIR FREIGHT RATE TARIFF NO. 5, C.A.B. NO. 17. IN THE AUDIT OF PAF'S BILL, OUR TRANSPORTATION DIVISION DETERMINED THAT SINCE THE SHIPMENT MOVED ENTIRELY BY MOTOR CARRIER SURFACE TRANSPORTATION, LOWER CHARGES OF $1,350.57 RESULTED BY USING THE APPLICABLE MOTOR CARRIER TARIFFS. THE USE OF THIS BASIS RESULTED IN AN OVERCHARGE OF $4,420.08 WHICH WAS COLLECTED BY OFFSET WHEN PAF FAILED TO MAKE A VOLUNTARY REFUND. PAF'S LATER CLAIM FOR $4,420.08 WAS DISALLOWED IN THE SETTLEMENT CERTIFICATE HERE UNDER REVIEW.

YOU CONTEND THAT IN HANDLING THIS SHIPMENT PAF PERFORMED AIR TRANSPORTATION WITHIN THE MEANING OF THE FEDERAL AVIATION ACT OF 1958, 49 U.S.C. 1301, ET SEQ., THAT PAF'S AIR TARIFFS APPLIED TO THE TRANSPORTATION, AND THAT IN SETTLING THE CLAIM, OUR TRANSPORTATION DIVISION FAILED TO RECOGNIZE THE EXPENSE INCURRED BY PAF BECAUSE OF THE EMERGENCY NATURE OF THE SHIPMENT. YOU ENCLOSE COPIES OF THE UNDERLYING MOTOR CARRIER FREIGHT BILLS WHICH PURPORT TO SHOW THAT PAF PAID A TOTAL OF $2,689.93 FOR THE THROUGH MOTOR CARRIER TRANSPORTATION, $330.33 TO QUICK AIR FREIGHT FOR SURFACE TRANSPORTATION FROM COLUMBUS TO INDIANAPOLIS, INDIANA, AND $2,359.60 TO CONSOLIDATED FREIGHTWAYS FOR EXCLUSIVE USE OF VEHICLE SERVICE FROM INDIANAPOLIS TO OAKLAND AND TRAVIS AIR FORCE BASE, CALIFORNIA.

PACIFIC AIR FREIGHT WAS AUTHORIZED BY THE CIVIL AERONAUTICS BOARD TO OPERATE AS AN AIR FREIGHT FORWARDER IN INTERSTATE AIR TRANSPORTATION AND WAS AN AIR CARRIER WITHIN THE MEANING OF SECTION 101 (3) OF THE FEDERAL AVIATION ACT OF 1958, AS AMENDED, 49 U.S.C. 1301 (3). AS SUCH, IT WAS REQUIRED TO FILE WITH THE BOARD TARIFFS SHOWING ALL RATES, FARES AND CHARGES FOR AIR TRANSPORTATION BETWEEN POINTS SERVED BY IT, AND SHOWING TO THE EXTENT REQUIRED BY REGULATIONS OF THE BOARD, ALL CLASSIFICATIONS, RULES, REGULATIONS, PRACTICES, AND SERVICES IN CONNECTION WITH SUCH AIR TRANSPORTATION. SECTION 403 (A) OF THE FEDERAL AVIATION ACT OF 1958, 49 U.S.C. 1373 (A). FURTHERMORE, IT WAS PROHIBITED FROM CHARGING, DEMANDING, COLLECTING, OR RECEIVING A GREATER OR LESS OR DIFFERENT COMPENSATION FOR AIR TRANSPORTATION, OR FOR ANY SERVICE IN CONNECTION THEREWITH, THAN THE RATES, FARES, AND CHARGES SPECIFIED IN ITS TARIFFS EFFECTIVE AT THE TIME THE SHIPMENT MOVED. SECTION 403 (B) OF THE FEDERAL AVIATION ACT OF 1958, 49 U.S.C. 1373 (B).

PAF HAD SUCH A TARIFF ON FILE, TARIFF NO. 5, C.A.B. NO. 17, WHICH YOU CONTEND IS APPLICABLE TO THE SERVICE ACTUALLY RENDERED. TARIFF NO. 5 IS GOVERNED BY PACIFIC AIR FREIGHT RULES TARIFF NO. 1, C.A.B. NO. 1. YOU REFER TO PARAGRAPH 4 OF RULE NO. 3.5, TITLED,"PROVISION FOR CARRIAGE," AS JUSTIFYING THE PAYMENT OF AIR FREIGHT FORWARDER CHARGES BASED ON TARIFF NO. 5. PARAGRAPH 4 OF RULE NO. 3.5, EFFECTIVE MARCH 24, 1950, READS: "THE FORWARDER, IN THE EXERCISE OF DUE DILIGENCE AND IN ORDER TO PROTECT ALL PROPERTY ACCEPTED FOR TRANSPORTATION, RESERVES THE RIGHT: * * * "4. FORWARD, WHEN NECESSARY IN ITS OPINION, TO EXPEDITE DELIVERY, VIA ANY ROUTE OR CARRIER BETWEEN ORIGIN AND DESTINATION. * * * "

TARIFF NO. 5 IS APPLICABLE TO "AIR FREIGHT" AND PROVIDES RATES AND CHARGES WHICH APPLY FROM AIRPORT TO AIRPORT. THE TARIFF IS ISSUED BY AN INDIRECT AIR CARRIER TO COVER AIR TRANSPORTATION SERVICE. 49 U.S.C. 1301 (A) STATES THAT "AIR TRANSPORTATION" MEANS INTERSTATE, OVERSEAS, OR FOREIGN AIR TRANSPORTATION OR THE TRANSPORTATION OF MAIL BY AIRCRAFT.

TITLE 14 OF THE CODE OF FEDERAL REGULATIONS STATES IN PARAGRAPH 296.2 (A) THAT:

"-AIR FREIGHT FORWARDER- MEANS ANY INDIRECT AIR CARRIER WHICH * * * ASSEMBLES AND CONSOLIDATES OR PROVIDES FOR ASSEMBLING AND CONSOLIDATING SUCH PROPERTY OR PERFORMS OR PROVIDES FOR THE PERFORMANCE OF BREAK-BULK AND DISTRIBUTING OPERATIONS WITH RESPECT TO CONSOLIDATED SHIPMENTS, AND IS RESPONSIBLE FOR THE TRANSPORTATION OF PROPERTY FROM THE POINT OF RECEIPT TO POINT OF DESTINATION AND UTILIZES FOR THE WHOLE OR ANY PART OF SUCH TRANSPORTATION THE SERVICES OF A DIRECT AIR CARRIER.'

THUS, UNDER THE FEDERAL AVIATION ACT OF 1958, AS AMENDED, AND UNDER THE CODE OF FEDERAL REGULATIONS, IT DOES NOT APPEAR THAT THE SERVICE RENDERED ON THIS SHIPMENT WAS AIR TRANSPORTATION PERFORMED BY AN INDIRECT AIR CARRIER OR AIR FREIGHT FORWARDER AS CONTEMPLATED BY YOUR TARIFF NO. 5 AND TARIFF NO. 1.

MOREOVER, EVEN IF IT WERE SO CONSTRUED, IT DOES NOT APPEAR THAT PAF'S TARIFFS, IN EFFECT AT THE TIME THE SERVICE WAS PERFORMED, CONTAINED ANY PROVISION OTHER THAN PARAGRAPH 4 OF RULE 3.5, QUOTED ABOVE, FOR THE SERVICE OR FOR ANY SUBSTITUTE SERVICE IN LIEU OF AIR TRANSPORTATION. DO NOT READ PARAGRAPH 4 OF RULE NO. 3.5 AS PROVIDING FOR THE SUBSTITUTION OF ALL SURFACE TRANSPORTATION FOR THE AIR TRANSPORTATION HELD OUT TO THE SHIPPER IN YOUR TARIFFS. CERTAINLY PARAGRAPH (I) OF RULE NO. 2.4 OF TARIFF NO. 1, PROVIDING THAT THE "FORWARDER RESERVES THE RIGHT TO REFUSE TO CARRY OR FORWARD ANY ARTICLE IF SUCH CARRIAGE OR FORWARDING IS IMPOSSIBLE FOR REASONS BEYOND HIS CONTROL," SEEMS TO BE CONSISTENT WITH THAT VIEW. AND APPARENTLY THE CIVIL AERONAUTICS BOARD DISAGREES WITH YOUR CONSTRUCTION OF PARAGRAPH 4 OF RULE NO. 3.5. SEE PART 2 (E) OF THE BOARD'S ORDER TO CEASE AND DESIST, ISSUED IN PACIFIC AIR FREIGHT, INC., ENFORCEMENT PROCEEDING, DOCKET 18568, ORDER NO. E-26813, MAY 20, 1968. ANY EVENT AND SEEMINGLY TO COMPLY WITH THE BOARD'S ORDER, THERE WAS INCLUDED IN TARIFF NO. 1, EFFECTIVE JULY 17, 1968, SOME TWO YEARS AFTER THE SHIPMENT MOVED, RULE NO. 3.12, TITLED,"SUBSTITUTION OF SERVICE FOR AIR TRANSPORTATION," (3RD REVISED PAGE 14). SUCH RULE WAS REVISED EFFECTIVE AUGUST 1, 1968 (4TH REVISED PAGE 14) TO READ AS FOLLOWS: "WHEN, FOR ANY REASON, INCLUDING TEMPORARY SUSPENSION OF AIR SERVICE, REFUSAL OR INABILITY OF THE AIR CARRIER TO PERFORM SERVICES REQUESTED, EMBARGOES, STRIKES OR OTHER CAUSES, DIVERSION OF SHIPMENTS TO OTHER MEANS OF TRANSPORTATION IS NECESSARY, THE FORWARDER SHALL USE HIS BEST JUDGMENT AS TO THE MEANS OF TRANSPORTATION TO BE SELECTED. NO REDUCTION OR REFUND OF CHARGES WILL BE MADE WHEN, UNDER THE PROVISIONS OF THIS RULE, IT BECOMES NECESSARY TO UTILIZE OTHER THAN AIR TRANSPORTATION IN ORDER TO EXPEDITE THE SHIPMENT.'

YOU ALSO URGE THAT PAF'S TARIFF CHARGES ARE LEGALLY ASSESSABLE BECAUSE THE TRANSPORTATION SERVICE ACTUALLY PERFORMED FALLS WITHIN THE CRITERIA FOR EMERGENCY TRANSPORTATION UNDER AN INTERSTATE COMMERCE COMMISSION REGULATION, I.E., 49 C.F.R. 210.40 (B). WHILE THIS SEEMS TO BE TRUE, WE BELIEVE THAT THE PURPOSE OF THE REGULATION IS TO EXEMPT FROM INTERSTATE COMMERCE COMMISSION CERTIFICATION AND PERMIT REQUIREMENTS TRANSPORTATION PERFORMED WHICH IS INCIDENTAL TO TRANSPORTATION BY AIRCRAFT (SEE 49 U.S.C. 303 (B) 7 (A) ( AND, IN THE ABSENCE OF AN APPROPRIATE PROVISION IN PAF'S TARIFF, IT DOES NOT REQUIRE THE ASSESSMENT OF TRANSPORTATION CHARGES FROM PAF'S TARIFFS.

IN THE ABSENCE OF A SUBSTITUTED SERVICE PROVISION IN EFFECT AT THE TIME THE SHIPMENT MOVED IN PAF'S TARIFF, WE FEEL THAT PAF IS ENTITLED TO NO MORE THAN THE CHARGES IT WAS LEGALLY REQUIRED TO ADVANCE TO THE MOTOR CARRIERS FOR THE SURFACE TRANSPORTATION ACTUALLY PERFORMED.

WE HAVE TODAY INSTRUCTED OUR TRANSPORTATION DIVISION TO REOPEN THE SETTLEMENT OF SEPTEMBER 18, 1968, AND TO REEXAMINE AND COMPUTE THE ALLOWABLE TRANSPORTATION CHARGES CONSISTENT WITH THE REASONS EXPRESSED HEREIN. NOTICE OF ANY ALLOWANCE SHOULD REACH YOU IN DUE COURSE.